U.K. industrial stocks have faced a challenging 2025, underperforming the broader market by 11.8% as macroeconomic uncertainty and tariffs weighed on sentiment.
Despite that, Berenberg analysts initiated coverage of Strix Group, Trifast and Zotefoams with “buy” ratings, citing company-specific changes that could provide turning points for their share prices.
Strix Group, a manufacturer of kettle safety controls and water management components, was highlighted as a value play.
About 30% of its 2024 revenue came from its Billi unit, which has been growing at 10% annually.
Its core kettle controls division, representing 48% of revenue, is more subdued but maintains high cash conversion rates above 90%.
Strix trades on an FY25 price-to-earnings (P/E) ratio of 5.9x and has a free cash flow yield of 14.3%. The stock closed at 43p on Aug. 22, with a price target of 90p set by the analysts.
Trifast, which designs and distributes industrial fastenings, is viewed as a recovery story. New management began a turnaround plan in 2023, and by 2025 its EBIT margin rose 160 basis points to 6.7%.
Forecasts see margins rising further to 11.2% by 2029. Trifast trades on an FY25 P/E of 11.3x and has a free cash flow yield of 16%. Shares stood at 77p on Aug. 22, with a target price of 130p.
Zotefoams, a producer of high-performance foams, was identified as a growth stock. The company has shifted strategy to emphasize customer value and expanded in Asia to strengthen its supply to Nike, which accounts for a third of revenue.
Analysts expect earnings per share to accelerate by about 40% between 2024 and 2027, though near-term free cash flow will be low due to investment.
The stock trades on a FY25 P/E of 13.8x and a free cash flow yield of 7.2%. Shares were at 420p on Aug. 22, with a price target of 540p.
The analysts said Strix has the most potential upside at 115%, while Zotefoams remains attractive despite its recent rally.
The broader U.K. industrials sector, while under pressure, continues to show resilience in niches such as electrification and environmental technologies.
Source :
https://www.investing.com/news/stock-market-news/berenberg-flags-strix-trifast-zotefoams-for-upside-as-uk-industrials-lag-4212177
